Misery index (economics)

The misery index is an economic indicator created by American economist Arthur Okun to gauge how the average citizen is faring economically. It is calculated by adding the seasonally adjusted unemployment rate to the annual inflation rate, on the reasoning that both rising unemployment and worsening inflation impose real economic and social costs on a country, so their sum offers a simple combined gauge of economic hardship. Other economists have since built their own variants on Okun's original: Robert Barro's version adds an interest-rate term and the shortfall of actual GDP growth below its trend rate to the same unemployment-and-inflation sum, and Johns Hopkins economist Steve Hanke built on Barro's version from the late 2000s onward, applying his own variant, the sum of interest, inflation and unemployment rates minus per-capita GDP growth, to rank misery across many countries beyond the United States. This description is adapted from Wikipedia contributors under CC BY-SA 4.0; changes were made. https://creativecommons.org/licenses/by-sa/4.0/